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Master of all you survey?

Surveys to identify potential individual witnesses take a hit in latest round of Marks and Spencer v Interflora

How useful are surveys as evidence in trade mark infringement cases? There has long been a question mark over their true representation of public opinion, be that confusion or product recognition. In the past, whilst the absolute statistical results of surveys have often been criticised by judges and disallowed as evidence, surveys have more successfully been used to select appropriate witnesses to appear before the court and give direct evidence.

This latest decision in the Marks and Spencer v Interflora battle over the use of sponsored keywords in online searching, looked at whether such pilot surveys or "witness gathering exercises" can generate genuinely representative witnesses and whether their evidence should be admissible.

Summary

In M & S v Interflora [2012] EWCA 1501 on 20 November, the Court of Appeal took a strict line, with specific recommendations for the presentation of survey evidence and selection of witnesses via pilot surveys, including the revelation of the details of the process of selection and recommended waiver of privilege in this regard in order to improve the probative value of the evidence itself. Further, pilot surveys at least will be at the surveying party's risk from a costs point of view. The encouragement of speculation by witnesses in areas they would not otherwise have "embarked" on was also disapproved of.

The Court of Appeal, found that Interflora had not demonstrated that the evidence it was to adduce via witnesses identified using a pilot survey would be of any "real value": "to put it bluntly, Interflora starts with an unreliable dataset from which it proposes to select the witnesses most favourable to itself".

In questions posed on appeal from a decision of Arnold J , the Court of Appeal was asked whether there was a rule of law which laid down a principle that evidence of witnesses identified by means of witness gathering exercises is always admissible or always inadmissible; if admissible should it nevertheless be excluded in exercise of the court's powers under CPR 32.1(2); and should the particular means by which the witnesses were identified in the particular case lead the court to exclude the evidence of those witnesses.

The Court concluded that it was irrelevant whether such evidence was technically admissible, "if it cannot be useful, it should not be allowed to distract the focus of the trial even if it is technically admissible" (paragraph 76). The appeal was allowed: evidence should not be adduced from witnesses selected as a result of a survey, unless the survey itself was statistically reliable.

The judgment contains a comprehensive review of survey evidence and the history of its treatment by the courts of England and Wales.

Business Impact

The practical impact on the use of surveys may in fact be to increase their use since, with the appropriate information provided as per its itemised requirements, the Court of Appeal has effectively sanctioned their use.

In terms of the structure of such surveys in future and selection of witnesses using them, parties would do well to follow the Whitford guidelines (see below) and the requirements laid out in this Court of Appeal decision.

There is however a significant initial costs risk to any party seeking to set up a pilot survey – unless it subsequently proves to have generated the right sort of witnesses, the cost is unlikely to be recoverable.

The suggestion that waiver of privilege in relation to the selection of witnesses from the pilot survey will be required before their evidence can be given full weight will also be a major consideration in assessing the advisability of using surveys (or "other experiments") to select witnesses.

The question of whether a question is leading enough to exclude the evidence of a witness who answers was also addressed. The Court of Appeal which found that Arnold J was entitled to come to the value judgment that questions carrying innuendo that there was a connection between M& S and Interflora, which was the very question at issue, would produce tainted evidence from interviewees and so such evidence should not be allowed.

Questions that take a potential witness into an area of speculative opinion or consideration into which they would not normally have strayed from a viewing of the use of the trade mark, were also doubtful in terms of evidential value and should be avoided.

There is an open question remaining, when a Court is being asked to consider evidence selected by a survey and when a party simply puts forward evidence from selected individuals from a log gathered of members of the public that have complained unprompted.

Background

IP newsflash readers will recall the keyword advertising case Marks and Spencer v Interflora which went all the way to the CJEU. The issue concerned whether searching "Interflora" on the internet and getting a competitor's website in the sponsored results was an infringement of the trade mark rights in the name "Interflora" which had been purchased as a keyword by Marks and Spencer triggering their flower service to appear in the sponsored results on the search page.

The conclusion of the CJEU was that the proprietor of a trade mark is entitled to object to the use of a trade mark as a keyword where:

A reasonably well-informed and reasonably observant user cannot tell if the goods originate from the trade mark proprietor or a third party.

Advertising on the basis of a keyword contributes to turning the trade mark into a generic term.

It is however legitimate for advertisers to present themselves as commercial alternatives to the trade mark proprietor (see our IP newsflash of 26 September 2011 for more on this CJEU decision). Although the CJEU was willing to recognise the potential impact of keywords on a number of the functions of a trade mark (indication of origin, investment function, advertising function), it also recognised that most internet users are reasonably savvy, meaning that it seemed potentially difficult for brand owners to demonstrate infringement of their rights, unless there was confusion as to origin or a risk of the trade mark becoming generic.

The case returned to the High Court in June 2012, when Arnold J granted permission for Interflora to call witnesses identified from one witness generation/pilot survey in order to provide evidence of confusion or genericisation, but refused permission to use witnesses generated by a second exercise.

Key findings

The Court of Appeal concluded that:

A party may conduct a true pilot surveys (to identify witnesses) without the court's permission but at his own risk as to costs

No further survey may be conducted or adduced in evidence without the court's permission

No party may adduce evidence from respondents to any survey without the courts permission

In deciding whether to give permission, the court must evaluate the results of the material placed before it (from the pilot survey). Only if the court is satisfied that the evidence is likely to be of real value should permission be given. The reliability of the survey is likely to play an important part in that evaluation. Even then the court must be satisfied that the value justifies the cost. This requires the court to do a cost/benefit analysis. In the case of trade mark infringement in which the issue is one of deception in relation to the provision of ordinary consumer goods or services, these criteria are likely to be satisfied only in a special or unusual case.

If permission to carry out a survey is sought, the applicant should provide the court with:

The results of any pilot survey

Evidence that any further survey will comply with the Whitford guidelines (see below)

The cost of carrying out the pilot survey and the estimated cost of carrying out the further survey

If permission is sought to call witnesses who have responded to a survey (or "other experiment") the applicant should:

Provide the court with witness statements from witnesses proposed to be called

Demonstrate that their evidence will be of real value in deciding the issue the court has to decide

Identify the survery or other experiment and, where questionnaires were used, disclose how many surveys have been carried out, exactly how these surveys were conducted, give the total number of persons involved and their answers to all the questions posed

Disclose how the proposed witnesses were selected from among the respondents to the survey

Provide the court with the cost of carrying out the pilot survey and the estimated costs of carrying out any further work in relation to those witnesses

Waiving privilege: The Court of Appeal said that it could have a material effect on the court's decision whether (and to the extent to which) the applicant was prepared to waive privilege in so far as it attached to the selection, interviewing and preparation of witness statements for the witnesses propose to be called. The court's reasoning was that in the absence of such a waiver, a party that wishes to challenge the evidence was likely not to be able to do so effectively and in particular would not know what questions were asked of the witness in order to prepare the witness statement. The Court of Appeal stated that if the evidence proposed to be called could not be effectively challenged that could in itself reduce its potential probative value.

Active case management: CPR Part 1.4(2) required the court to actively manage a case including at (h) "considering whether the likely benefits of taking a particular step justify the cost of taking it". It was an "undue and unfair burden" on the other party for one party to tender in evidence witness statements from selected respondents to a questionnaire without even undertaking to produce a selection that demonstrates the full range of answers to the questions. This places the burden on the defendant to disprove the validity of the selection, rather than on the claimant to validate it. Such a burdent could only be justified if the party tendering the evidence could show that it is likely to have a real impact on the outcome of the trial.

Whitford guidelines

The Court of Appeal referred to the Whitford guidelines as set out by Whitford J in Imperial Group plc v Philip Morris Ltd [1984], where he severely criticised the survey evidence put before him. These guidelines were (as summarised here by the Court of Appeal):

if a survey is to have any validity at all, the way in which the interviewees are selected must be established as being done by a method such that a relevant cross-section of the public is interviewed;

any survey must be of a size which is sufficient to produce some relevant result viewed on a statistical basis;

the party relying on the survey must give the fullest possible disclosure of exactly how many surveys they have carried out, exactly how those surveys were conducted and the totality of the number of persons involved, because otherwise it is impossible to draw any reliable inference from answers given by a few respondents;

the questions asked must not be leading; and must not direct the person answering the question into a field of speculation upon which that person would never have embarked had the question not been put;

exact answers and not some sort of abbreviation or digest of the exact answer must be recorded;

the totality of all answers given to all surveys should be disclosed; and

the instructions given to interviewers must also be disclosed.

Survey evidence that may be adduced

The Court of Appeal commented that it was not concluding that there could never be evidence called in a case of trade mark infringement; the court might want to know about shopping habits or details of the profile of the market in which certain goods or services were supplied or the means by which goods or services were marketed etc. Evidence of spontaneous reactions of members of the public to an allegedly infringing sign (rather than suggestive introductory sentences being used before answers were recorded) might be viewed differently, as would evidence where the goods or services in question were not of a type supplied to ordinary consumers and were unlikely to be within the judge's experience. Acquired distinctiveness could also be a category of evidence that would be assessed differently as would passing off. In all of these cases, a judge might think it useful to hear from consumers.

Compare jurisdictions: Litigation: Enforcement of Foreign Judgments

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